Delegation,Ownership Concentration and R&D Spending: Evidence From Italy

We use data from the Italian manufacturing industry to document a positive correlation between delegation and R&D. This result is robust to controlling for the determinants of R&D such as human capital, capital intensity and sectoral or regional effects. We further investigate the determinants of delegation and find that ownership concentration is significantly related to delegation. Among large firms with a dispersed ownership structure, larger ownership concentration implies less delegation, whereas the opposite emerges with more concentrated ownership. Differences between the Northern and Southern regions in terms of firms' propensity to delegate decisions and engage in R&D also emerge.     

A Closer Look at Cross‐functional R&D Cooperation for Innovativeness: Innovation‐oriented Leadership and Human Resource Practices as Driving Forces

Because cross‐functional research and development (R&D) cooperation appears to drive innovation, many firms have invested considerably in it. However, despite substantial efforts to improve information and communication infrastructures or to bring departments in closer proximity with one another, structural investments often fail to produce the desired positive impact on cross‐functional R&D cooperation. This failure may arise because firms undertaking these structural investments do not manage their employees adequately. Extant research acknowledges the importance of motivating and enabling members of the R&D function to cooperate with other functions. Yet empirical studies investigating the relative importance of leadership and different human resource (HR) practices for enhancing cross‐functional R&D cooperation are scarce. Drawing on the resource‐based view and organizational support theory, this study investigates how innovation‐oriented leadership and HR practices might support members of the R&D function and encourage cross‐functional R&D cooperation, which enhances product program innovativeness. Specifically, members of the R&D function who are supported in their innovation efforts through innovation‐oriented leadership and HR practices should reciprocate for the support they receive by intensifying their cross‐functional cooperation to achieve greater product program innovativeness. Relying on multi‐informant data from 125 firms with assessments from marketing and R&D managers, this study shows that innovation‐oriented leadership and HR practices have different effects on cross‐functional R&D cooperation. A structural equation modeling‐based analysis of the hypothesized relationships reveals that innovation‐oriented leadership, rewards, and training and development have considerable positive effects. In contrast, recruitment does not drive cross‐functional R&D cooperation. Because firms usually operate in dynamic markets, and increasingly acquire relevant information from customers when generating innovations, this study also considers market‐related dynamism and customer integration as important contingency factors. For firms facing market‐related dynamism and those relying on customer integration, leadership and training and development are particularly effective for enhancing cross‐functional R&D cooperation. By integrating two theoretical perspectives, this study not only advances knowledge on the antecedents of cross‐functional R&D cooperation, but also helps explain differences in their relative effectiveness. Furthermore, it both adds to the discussion of whether monetary rewards are appropriate means to foster innovation and challenges existing assumptions about the role of recruiting for innovation.     

Exploratory Results on the Importance of R&D Knowledge Domains in Businesses with Different Strategies

A number of studies have described the consequences of the changing patterns in the business environment for R&D departments. Fewer studies have addressed the specific implications of the changing business environment for the agenda of R&D managers. Gupta and Wilemon (1996) have provided R&D managers with a priority list for action designed to be applicable to R&D departments independent of business strategy. However, a substantial body of literature suggests that the priority listing may be different for R&D departments in businesses with different strategies. Against this background this study sets out to determine whether the priority listing is different for Miles and Snow's (1978) strategic archetypes of prospectors, analyzers, defenders and reactors. A total of 72 R&D managers of businesses competing in industrial markets in the Netherlands provided the data to test for the existence of these differences. The results indicate that the priority listings are indeed different for R&D departments in businesses with different strategies. This finding has important practical implications. The priority listings can be used by R&D managers to assess which R&D capabilities have to be developed in order to match R&D strategy with business strategy and meet the criteria for getting more commercial payback from R&D in a changing business environment.     

R&D validation planning: a methodology to link technical validations to benefits measurement

An important activity in many R&D departments is the internal development of new process technologies and practices to assist in the marketing, design and manufacturing activities of the enterprise. An integral part of this R&D development is the planning and management of validations of potential technology projects. These validations are necessary to determine the technical, financial and organizational feasibility of the projects and to develop data for benefits measurement for further funding of selected projects. This paper describes a methodology for validation planning of new process technologies and practices. The methodology allows for the explicit linkage of a validation to the identification of its financial and strategic benefits. These often diverse measures of worth are integrated using a proven multi-attribute justification approach within the planning methodology. The methodology and the multi-attribute approach also support the comparison of dissimilar projects having different benefits. The methodology acts as an organizational planning tool integrating the needs of the diverse constituencies involved in R&D planning. It also acts as a tool to aid engineers and scientists identify and present the benefits of the proposed technology.     

The growth and management of R&D outsourcing: evidence from UK pharmaceuticals

Outsourcing of research and development (R&D) activities has become a major management issue for R&D and technical managers within firms. It has also been of growing concern to academics who are trying to chart the implications of the increasingly distributed nature of research and innovative activities in advanced economies. This study is based on a survey of research-based pharmaceutical companies operating in the United Kingdom conducted in 2004–2006. The aim of this paper is to outline the main reasons for pharmaceutical firms to outsource R&D and the management practices followed by such companies in relation to outsourcing. The research results provide interesting findings in relation to, for example, the reasons behind outsourcing, the decision-making processes behind such practices and barriers to outsourcing arrangements. These issues are evaluated together with the characteristics of the firms and the specific project outsourced.     

The Credibility–Cooperation Connection at the R&D-Marketing Interface

Research and development (R&D) managers' perceptions of both marketing information and marketing managers are analyzed using an information and source credibility framework. The findings are based on a study of R&D directors in 80 technology-intensive companies and focus on activities and interactions during the new product development process. The authors found that the R&D managers' perceptions differed significantly in high and low integration companies. These perceptions also were influenced by various organizational practices. The R&D-marketing cooperation was highest where organizational practices were conducive to cooperation and R&D perceived marketing input as credible. Several implications for creating a corporate climate conducive to interfunctional cooperation are developed.     

R&D subsidiary isolation in knowledge-intensive industries: evidence from Austria

We investigate R&D subsidiary isolation within Multinational Corporations (MNCs) competing in knowledge-intensive industries. For such MNCs, accessing knowledge and nurturing the innovative potential of R&D subsidiaries is vital for on-going competitiveness. This, according to conventional thinking, requires integration of the subsidiary within the host country as well as internally within the MNC. Recent studies have shown, however, that overseas subsidiaries can become isolated (i.e., losing requisite integration), even in high-technology sectors. We tackle this issue by focusing on organizational factors at corporate and subsidiary levels that have the potential to explain subsidiary isolation. We analyze a sample of 45 foreign-owned Austrian subsidiaries undertaking R&D in knowledge-intensive industries using a combination of questionnaire and secondary data. The results suggest that parent and subsidiary experience, the degree of early-stage research conducted by the subsidiary and the use of training and rotation practices by the subsidiary, all act to counter isolation. Interestingly, we find that proximity between parent and R&D subsidiary does not play a significant role in predicting isolation. We also show how these factors influence communication frequency between the R&D subsidiary and various actors within the internal and the external networks in different ways.     

HRM and project intensification in R&D-based companies: a study of Volvo Car Corporation and AstraZeneca

Projects have become the standard mode of organising R&D activities. The main focus of this paper is to analyse the relationship between the project operations of the R&D-based firm and its Human Resource Management (HRM). This paper draws on a comparative case study of AstraZeneca and Volvo Car Corporation. It is argued that the project intensification currently under way has some important structural and content effects on the HRM practice of the firms. As to the content effects, we identify five critical areas within the HRM practice where special attention is needed due to project intensification. As to the structural effects, we identify two separate logics for HR specialists: the HR-based logic and the task-based logic. These logics give new knowledge about the design of the HR organisation and how the HR departmental structures should be adapted in a project-intensive setting. The case studies also illustrate three alternative roles for line managers when they assume increased HR responsibility.     

Economic compensation compositions preferred by R&D personnel of different R&D types and intrinsic values

In order to enhance R&D performance, R&D managers make sure that R&D personnel are satisfied with their compensation, both economic and non–economic . An R&D compensation scheme would consist of many complex factors. In this research, we focus on 'compensation composition' as such a factor for the economic compensation system, i.e., the mix of compensation components such as team (or organization) performance based, individual (R&D personnel) performance based, and fixed (seniority based) portion of economic compensation. As part of non–economic compensation, intrinsic values such as social status and self–actualization perceived by the R&D personnel are influencing their level of satisfaction with the entire compensation system. Another critical factor we consider here is the difference in R&D types: there are three R&D types, i.e., basic, applied , and commercial R&D . We put forth two sets of propositions. First, there is statistically significant correlation among R&D personnel's job satisfaction, performance measurement satisfaction, and compensation satisfaction. Second, depending on the types of their R&D activities, R&D personnel prefer a certain composition of economic compensation. In addition, the relationships are mediated by whether the R&D personnel feel intrinsic values of their jobs.     

How entrepreneurial orientation can leverage innovation project portfolio management

Innovation project portfolio management (IPPM) is a key task in R&D management because this decision‐making process determines which R&D projects should be undertaken and how R&D resources are allocated. Previous research has developed a good understanding of the role of IPPM in R&D strategy implementation and of successful IPPM practices. But the fundamental orientations that drive the strategy formation and implementation process have never been investigated in the context of IPPM, and it is unclear whether successful practices are equally valid for different strategic orientations. This study, therefore, investigates the moderating impact of a firm’s entrepreneurial orientation on the relationship between strategic portfolio management practices and portfolio success. An empirical analysis of 257 firms shows that both innovativeness and risk taking as entrepreneurial orientation’s dimensions positively moderate the relationship between managerial practices and performance. Specifically, we find that firms high in innovativeness profit more from stakeholder engagement compared to firms low in innovativeness. Firms high in risk‐taking profit more from a clearly formulated strategy. With increasing innovativeness and risk‐taking propensity, firms also profit more from business case monitoring and agility in portfolio steering. The results suggest that a firm’s entrepreneurial orientation can leverage the effect of IPPM practices. Vice versa, a lacking entrepreneurial orientation can render these practices ineffective. Strategic orientation and IPPM practices should, therefore, be aligned with each other to enable firms to better implement their strategy and generate competitive advantage.     

Joint learning in R&D collaborations and the facilitating relational practices

The present study considers joint learning as a relational dynamic capability and examines the role of relational practices as enablers of joint learning in R&D collaboration between suppliers and their customers. The study applies a qualitative comparative case method to analyze seven dyadic cases, selected based on a quantitative dataset and cluster analysis. Our results indicate that in dyadic relationships, firms would benefit from developing practices related to relational investments, relational structures, and relational capital that facilitate joint learning and yield collaborative advantages from R&D interactions. This paper contributes to the existing literature on joint learning in R&D collaborations by defining joint learning as a relational dynamic capability and by focusing on the practices that facilitate it in R&D collaboration.     

OVERSEAS R&D ACTIVITIES AND HOME PRODUCTIVITY GROWTH: EVIDENCE FROM JAPANESE FIRM‐LEVEL DATA*

This paper investigates the impact of overseas subsidiaries' R&D activities on the productivity growth of parent firms using firm‐level data for Japanese multinational enterprises. Based on survey responses, we classify each overseas subsidiary's R&D as either ‘innovative R&D,’ which we hypothesize is likely to lead to the acquisition of foreign knowledge, or ‘adaptive R&D,’ which is more likely to lead to adaptation to local conditions. We find that overseas innovative R&D raises the parent firm's productivity growth, while adaptive R&D has no such effect. In addition, overseas innovative R&D does not improve the rate of return on home R&D.     

The Diffusion of Calculative and Collaborative HRM Practices in European Firms

The aim of this paper is to trace and explain variations in calculative and collaborative human resource management (HRM) practices between companies and across national borders. Variations and similarities are explained in terms of the convergence and divergence of HRM practices determined by national institutions, and the increasing influence of multinational companies (MNCs). We explore the diffusion of HRM practices in Europe over time, using data sets from two surveys conducted in several European countries in 1995 and 2000. We use institutional explanations for the development of three selected bundles of HRM practices: individual, calculative performance‐oriented practices; collective incentive schemes for the alignment of interests; and collaborative practices that seek to enhance the commitment of employees. We found substantial effects of country‐specific institutions and of the country of origin of MNCs, which clearly support the institutional duality thesis. Foreign‐owned MNCs, especially those that are US‐based, appear to moderate country‐specific institutional effects on the diffusion of the three HRM bundles.     

The link between managerial style and the job characteristics of R&D professionals

Despite a growing body of evidence as to the importance of linking job design to supervisory practices, almost no empirical studies have been conducted on the issue specifically for R&D professionals. The effectiveness of supervisors should differ primarily with respect to their leadership styles. Data obtained from three major types of R&D organizations in Taiwan were used to examine how leadership styles affect the job characteristics of R&D professionals with personal attributes of professionals themselves as the concomitant variables. The leadership styles were defined in terms of a two dimensional construct with the supportive dimension focusing on enhancing relationship and participatory decision making, and the directive dimension emphasizing telling and directing to get tasks accomplished. The results supported most of the hypotheses proposed in the study. In particular, the high correlation of the supportive leadership style and overall job characteristics, across the three types of organizations in the test, demonstrates the importance of incorporating the role of supervision in the R&D job design. The findings have implications for enhancing the leadership effectiveness in managing R&D professionals. Such findings are not only important for R&D managers in newly industrialized countries, but are also valuable to their counterparts in industrialized countries.     

A contemporary justice perspective on dual ladders for R&D professionals

Research and development (R&D) professionals play a key role in companies' innovation performance. Whereas prior research has indicated the potential benefits of dual ladder career systems to retain and motivate R&D professionals, there is a lack of knowledge regarding the design properties of dual ladders that facilitate such positive effects. The purpose of this study is to address this research gap by exploring how organizations can design dual ladders to enhance R&D professionals' organizational commitment and career satisfaction. Drawing on contemporary justice theory, we point to two factors integral for the successful application of dual ladders: the perceived equality of the technical ladder and the transparency of the dual ladder. These factors are related to R&D professionals' organizational commitment and career satisfaction. Furthermore, this study investigates whether these relationships are moderated by R&D professionals' age and self‐directedness in career management as well as firm size. The hypotheses are tested in a cross‐level study with 9 heads of R&D departments, 32 human resource managers, and 382 R&D professionals from 32 organizations. Based on the analyses, this study finds positive relationships between the perceived equality and the transparency of the dual ladder with R&D professionals' organizational commitment and career satisfaction. In addition, the findings show that the effects of the perceived equality of the technical ladder on R&D professionals' career satisfaction are weaker at high levels of self‐directed career management. The study contributes by developing theory on the consequences of dual ladders' design properties and moderating influences thereon. Thus, this research has implications for the literature on innovation management by expanding the knowledge on the interplay between career management and the human side of innovation.     

The budgeting process for R&D laboratories

The author had been associated with the writing of a short series of case studies into the process by which companies allocate their R&D budgets to individual departments or projects. A key question became the location of responsibility for determining the objectives of work under-taken in R&D, and also responsibility for the allocation of resources in R&D.
The cases revealed that decisions were taken by senior R&D managers at one extreme, and by marketing or production managers at the other, but also most often jointly between the functions with different weightings of authority. The parameter most clearly differentiating between the loci of responsibility was the project duration. This led to the development of a two dimensional diagram correlating the expected remaining duration of the project, with the locus of responsibility for its management.
It is expected that this model which fits current practice into a normative framework will enable organizations to review and adjust their present methods of coping with the complexities of R&D budgeting.     

Knowledge Sharing through Face‐to‐Face Communication and Labour Productivity: Evidence from British Workplaces

We investigate whether the adoption by workplaces of human resources management (HRM) practices that enhance face‐to‐face communication (FTFC) among employees is associated with productivity gains. The analysis is based on a nationally representative sample of over 500 British trading establishments drawn from the linked 2004 Workplace Employment Relations Survey and Annual Business Inquiry, for which objective measures of labour productivity (value added per employee) are available. We find a positive association between productivity and FTFC in problem‐solving groups, teams and meetings of senior or line managers and employees, provided that FTFC is adopted on a continuous basis. Our finding suggests that British workplaces in the trading sector could increase their productivity by implementing HRM practices in such a way as to enhance knowledge sharing through employees' personal interactions.     

Knowledge management capabilities in R&D: a UK‐‐Japan company comparison

This paper uses a 'knowledge‐based' approach to compare the management of R&D in two leading chemicals companies, one British (ICI plc) and one Japanese. It describes key differences in the ways they integrate the 'near‐market' knowledge of business units and the scientific knowledge and technical expertise of R&D personnel in central R&D facilities. It shows that the same management practices that underpin superior 'integrative capabilities' in the Japanese firm, including central funding of R&D, job‐rotation and career structures and multidisciplinary project teams, also result in significant R&D weaknesses. The comparison demonstrates that different organisational mechanisms are needed to support (1) the development and (2) the leveraging of specialist knowledge within different innovation contexts . Firms must be able to strike a balance between integrative and specialist capabilities to get the most from their R&D. Moreover, the above characteristics which underpin these capabilities are often 'embedded' in the broader organisation making them difficult to emulate when they represent 'best‐practice' but also making them difficult to change in response to new threats and opportunities.